Applebee’s Neighborhood Grill & Bar
Bottom line
- Total investment $1.8M – $5.8M including a $35K franchise fee, 4.0% ongoing royalty.
- Average unit revenue of $2.8M/year (median $2.6M).
- Rated STRONG with a risk score of 48/100.
- 10 litigation matters disclosed in Item 3 — higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Applebee’s Neighborhood Grill & Bar unit return on the cash you put in?
Unlevered ROIC · per unit
10%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Applebee’s Neighborhood Grill & Bar units return on equity?
Equity IRR · 5-yr
28.7%
3.53× MOIC
Year-1 DSCR
2.82×
EBITDA ÷ debt service
Equity required
$10.0M
on $21.4M purchase
Total debt
$11.4M
SBA $5.0M + senior + seller note
Overview
About
Franchisees operate casual dining restaurants under the Applebee's brand, managing full-service food and beverage operations including kitchen, server, and bartending staff. Daily operations involve inventory management, food cost control, labor scheduling, marketing compliance with franchisor standards, and maintaining point-of-sale systems while remitting 4% royalties on all gross sales to the corporate franchisor.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 12 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Applebee's is a contracting franchise system with significant litigation exposure, undisclosed profitability metrics, unprotected territories, and evidence of franchisor-franchisee disputes that collectively suggest elevated risk for new unit investments.
Score breakdown · what drove the 48 / 100 rating
- 01MINORDeclining unit count (-7.3% YoY) indicates system contraction and weakening franchisee demand
- 02HIGHMultiple breach of contract litigations by franchisor against franchisees (Georgas, Mountain Apple, RMH, Apple Central KC, Louisiana Apple) suggests operational/compliance conflicts or franchisor overreach
- 03MINORNo average net income disclosure despite $2.76M average revenue—opaque profitability raises questions about actual franchisee earnings after 4% royalty, rent, labor, and food costs
- 04MINORHigh capital requirement ($1.77M–$5.82M) combined with declining system creates elevated risk of underperforming investment
- 05MINORUnprotected territory allows franchisor to add competing units, directly cannibalizing franchisee sales
- 06MINORMultiple class action and trademark disputes (Mendez, Vampire Family Brands, Watkins) indicate compliance and disclosure issues at corporate level
- 07MINOR20-year term lock-in is lengthy given system shrinkage and inability to exit if unit becomes unprofitable
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
55 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Applebee’s Neighborhood Grill & Bar · FDD (2025) PDF